Even Harvard Business School Professors Get It Wrong

Even Harvard Business School Professors Get It Wrongby Stan Faryna

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Two Harvard Business School professors have co-authored a book about business leadership: Capitalism at Risk: Rethinking the Role of Business. The book is published by the prestigious Harvard Business Press. I have not read this book. I watched the Harvard Business Review interview with the co-authors here. I watched the video because a friend sent me the link and thought it might be interesting to me.

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Assuming that the Harvard Business Publishing marketing department isn’t an amateur at marketing their own books, the interview gets to the heart of the book and focuses most on what they think is key to this book’s insights and recommendations. In this case, the heart is two sizes too small and it reeks to hell of bias, shillery, and propaganda.

Business can figure it out, say the co-authors. Business can lead social and economic change, solve disparities, injustice, and corruption AND overcome the obstacles that oppose or restrain the course of human Freedom. If it can do all that, capitalism is not at high risk.

Who are we trying to kid?

The crash of September 2008 brought the largest bankruptcies in world history with wide and dark consequences: 30+ million people were unemployed globally within six months and unemployment continues to grow three years later and foreseeably into the future. Millions were unable to pay their mortgages and lost their homes. Three years later, tens of millions more are about to lose their homes. This is just the tip of the iceberg.

Oh – did I mention it was “business” leaders that created a global economic meltdown that is more toxic than the unstoppable and toxic product of the Fukashima meltdown.

In my comment on HBR, I observe that the general public perception of business leaders does not reflect any kind of confidence in business leaders. As a group, today’s top business leaders neither demonstrate solidarity in magnificence, servant leadership, nor any collaborative capacity to realize great change.

Is there anything more important than stopping that tragedy, yesterday? A round of golf- perhaps?

As my friend Dr. Jack King often reminds me: true leaders are ‘one with’ the people, like the soaring eagle is one with the wind!

Are business leaders one with the world?

The world, we all believe, is FUBAR – in part – because of a certain lack of virtues, moral character, and vision of the same business leaders that the co-authors now argue… are the people who can save the world.

BP cares – no? Oh?! Reading BP’s recent response to U.S. government investigations regarding how BP screwed up, we see that sorry continues to be the hardest word.

Virtues are not celebrated in the boardroom. Nor in the stock exchange. A CEO’s bonuses are not based on tough decisions that produce socially relevant outcomes. Corporate citizenship is a buzz word, but when do companies and investors sacrifice profit and organization for the cause of Freedom, the welfare of a nation, or human hope?

HP once enjoyed the honor of being considered one of the best companies to work for in the United States. But come on down to Bucharest and see how HP exploits human beings. Let’s start with reviewing the average monthly salary that doesn’t cover an employee’s monthly rent, utilities, and food. Unpaid overtime and lots of overtime. Etcetera.

The fact is that HP’s C-suite and a few representative investors should be prosecuted and tried by an international court for crimes against humanity. Something like the Nuremberg Trials. Sorry Meg Whitman. Let’s chalk it up to bad timing for you.

Let’s find a dozen C-Suites and assorted major investors from the biggest companies to bring to trial. All of this must be done to set an example and scare the shit out of all the other so-called business leaders.

If so-called business leaders would take the initiative to set up the court and trial to clean their own mad house of evil, that would do much to establish their good, moral will and capacity to save the world. But I’m not holding my breath. Are you? Dutch Leonard? Lynn Paine?

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If Dutch Leonard and Lynn Paine represent the kind of false consciousness and lack of critical thinking skills that forms business thinking, business education, and corporate leadership training, we’re all in trouble.

Is Harvard credible? Relevant? In the last 20 years? Does Harvard, Standford, and Sloane teach that it is the people that empower leadership – not the other way around?

Of course, the problem isn’t just Harvard. Or is it?

Mark Zuckerberg is from Harvard. And he is selling information about you down to your dirty socks.

Did I forget to mention how Russian oil companies are disposing of Russia’s vast storehouse of expired chemical weapons via cheap gasoline now being burned in cars everywhere? The rumor is that it was a HBS grad that came up with the idea.

The contamination of Russian gasoline products, unfortunately, is not a rumor. The byproduct of burning expired chemical weapons is an inconvenient health threat to the world population. Keep in mind that it’s just a rumor about the HBS grad having the morally bankrupt idea.

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Stan Faryna
27 September 2011
Bucharest, Romania

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P.S. Your $5 can make a difference. If you can get 10 of your friends to give $5 too, you will make an even bigger difference. Please help Nisha to help others.

This is one of the main reasons it’s easy to see why government is important. There is constant political chatter from Republicans that government is not needed because as you stated from the authors, it is the Private sector that can fix the problems (it’s like history is forgotten since not everyone know it, so they can’t learn it?). Taking away emotions and that human touch, and let economics take course, then its justifiable for humans to die because funds are lacking, or not allocated to prevent it, come on, kids die due to problems that can be treated for cents a day. It’s the human element that doesn’t allow that problem to even be calculated in, and the profits are what drive what gets factored in. It could go on and on.

Like with healthcare here in the USA, if more people had it and profits weren’t the primary focus, then people wouldn’t have to lose their homes and their freedom of happiness, debt sucks and is a burden to anyone in all ways. Then again what is the cause for healthcare problems and the high costs associated. Maybe it’s the chemicals and pollutions that are created, that lead to problems. We know the increase in bad foods cause major problems with cholesterol, diabetes, and bad health. Not saying government is the way, but there are many who don’t want to be part of the private sector that values profit over livelihood. This is broad, but all I am trying to say is Government allow individuals to have a voice, these days money means a lot, such as being elected for important positions that can help to lead people to live better lives. Many to most of us all agree on what feels good and what doesn’t. Pain is pain, no matter who you are. Cold is cold, and wet is wet. But if you don’t have to experience it, then that doesn’t mean it’s doesn’t apply to everyone.

Back to bad foods, it’s accepted that those foods are completely ‘safe’, with the private sector using their marketing skills to share this view. It works, and being frugal is in, so buying cheaply produced food is GREAT. BS, but being able to sell millions and 10’s of millions of units a day, is BUSINESS to its fullest. I think another major problem is this way of thinking about life, basing it off of economics and fairy tales, is being spread as the norm. Someone once upon a time might have thought or said “people don’t need to die due to a $10,000 healthcare bill they can’t afford.” But in this modern day of problems, that the private sector helped to create by manipulating our government, some of those same people will say “well America is broke, yada yada, they should have healthcare (which they couldn’t afford $500 a month premiums), its not my concern” or its just not even a conscious.

Great article, I was going to not leave a comment, but this is important and I agree is something that more need to start to understand.

Pretty strong talk, but I can’t disagree. Corporate leaders do have the power to make change, but as long as they answer to a board of directors who is only concerned about how much profit they are making it won’t happen.

Some of the atrocities a blind eye is turned on is incredible. It’s like ‘are you kidding me’. As long as it’s not in your backyard too many people just don’t want to be involved.

I think there are a lot of thins we need to make distinctions about. The big corporate leaders aren’t paid to create cultural change, they’re paid to create “shareholder wealth” – whether they are doing that or not is completely different argument.

The small businesses and entrepreneurs of the world are the ones that create cultural change. Social media would never infiltrate big business the way it did if all of the small guys didn’t jump on board and show big business that this is the way of the future. Big businesses are too big to change quickly, it’s up to small guys to show the way.

I strongly believe in Capitalism in the sense that everyone should be born with an equal opportunity to succeed. That doesn’t mean that someone who is already successful should be punished and taxed so someone who isn’t as successful can have a better chance to prosper. If you’re starting at the bottom, you need to work your ass off and get to the top if that’s what you really want.

As far as starving people go, that is a tragedy that needs to be resolved for sure. However, it’s not necessarily the fault of Capitalism, rather the fault of lack of capitalism in poor countries. It’s unfortunate, but American citizens donate so much money to help aid other countries…and that money goes into dictator’s pockets, it doesn’t reach anyone that actually needs it.

I remember hearing a story about Somali pirates that intercept all of the help packages intended for impoverished children. And thousands of children then die from starvation. It’s heart-wrenching.

Capitalism (maybe not pure capitalism, but some form of it) has enabled countries to become rich enough to donate to those children. The problem lies on the receiving end where the pirates control everything.

“The problem lies on the receiving end where the pirates control everything.”

Eugene, you’re on to something here. And it speaks to my vision of the new Nuremberg court for the crimes of big business.

The oldest official song of the U.S. Military, the Marines Hymn, reminds us of early America’s struggle with piracy. The second line of the song speaks directly to our ongoing problem.

“From the halls of Montezuma, to the Shores of Tripoli…”

The line, “To the shores of Tripoli” refers to the First Barbary War and specifically to the victorious Battle of Derne in 1805. The Battle of Derne was the first recorded oversea land battle of the United States. The U.S. went to war with the Islamic Berber states of Morocco, Tripoli, Tunis, and Algiers because their muslim leaders sponsored piracy on the high seas. Capturing merchant ships, enslaving crews, and ransoming prominent captives, in fact, provided the Muslim rulers of these nations with considerable wealth and naval power.

From 1786 to Thomas Jefferson’s presidential inauguration in 1801, the U.S. paid one million dollars per year in blackmail payments to the Barbary Islamic states for the safe passage of American merchant ships. This blackmail money was equivalent to 20 percent of the U.S. Government’s entire annual budget.

Needless to say, we went to Tripoli, we kicked pirate ass, and we made the seas a little more safe.

This reminds me of the book “The Corporation”, where it clearly proves that Corporations exist for only one reason: to serve themselves. The books makes these cases:
* Corporations are required by law to elevate their own interests above those of others, making them prone to prey upon and exploit others without regard for legal rules or moral limits.
* Corporate social responsibility, though sometimes yielding positive results, most often serves to mask the corporation’s true character, not to change it.
* The corporation’s unbridled self interest victimizes individuals, the environment, and even shareholders, and can cause corporations to self-destruct, as recent Wall Street scandals reveal.
* Despite its flawed character, governments have freed the corporation from legal constraints through deregulation, and granted it ever greater power over society through privatization.

So.. are business leaders one with the world? um… no. They are are one with themselves.

Stan, I think you cannot expect corporations to perform charitable works any more than you can expect charities to produce a profit. These entities were formed for different reasons. But I agree, you can and should expect corporations to operate with virtue and with human good in mind. Corporations that poison, pollute and otherwise commit crimes should be prosecuted in the same way people should be.

At the same time, corporations that become too large should be broken up as monopolies, so competition can return to the market.

The government is in charge of enforcing criminal and anti-trust laws, but many of the government workers are hoping to become employed by the corporations they oversee.

Corporations are owned by shareholders and have a duty to maximize shareholder returns. With their earnings, shareholders can invest their profits in the economy, furthering prosperity. But not at the expense of society.